UPDATE ON BROAD STOCK MARKET (11:30 pm EST)
Last week, the DOW and S&P 500 dipped and tested the 15-day and 45-day moving averages, while the NASDAQ moved significantly below both. All three indices have since rebounded and are now closing above those averages. This looks bullish, but to confirm this, they all have to make new highs soon, and the NASDAQ has to break above its all-time high of 24,020 from last October to negate its bearish divergence to the other two indices. Until that happens, there is still the danger of this market turning bearish and taking a deep correction. We are now out of a strong reversal zone, but there is a weaker one coming up Feb. 2 - 11. We could see a significant low or a significant high in that time frame, depending on how this market moves this week and next. I am staying on the sidelines of the broad stock market for now.
Last week, the DOW and S&P 500 dipped and tested the 15-day and 45-day moving averages, while the NASDAQ moved significantly below both. All three indices have since rebounded and are now closing above those averages. This looks bullish, but to confirm this, they all have to make new highs soon, and the NASDAQ has to break above its all-time high of 24,020 from last October to negate its bearish divergence to the other two indices. Until that happens, there is still the danger of this market turning bearish and taking a deep correction. We are now out of a strong reversal zone, but there is a weaker one coming up Feb. 2 - 11. We could see a significant low or a significant high in that time frame, depending on how this market moves this week and next. I am staying on the sidelines of the broad stock market for now.
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